WHY IT IS IN EVERYONE'S INTEREST THAT AUSTRALIAN COMPANIES PAY NO TAX

Success in life — and in government policy — requires the discipline of delayed gratification. Doing what feels good in the moment often leads to poorer long-term outcomes. A famous Stanford study by Professor Walter Mischel in the 1960s showed that children who could resist immediate rewards went on to achieve higher academic scores, better health, stronger relationships, and greater success in business and life.

Company tax is a classic example of governments failing this test. Instead of allowing companies to reinvest profits and grow the economic pie, successive Australian governments have chosen to take a slice now — even though waiting would ultimately produce far more taxable wealth at higher individual rates.

Life's Choices: Tax Now or Tax Later?

Like any individual, a government has two basic options:

1. Take a portion of company profits each year (currently 25–30%), starving the business of capital it could reinvest to become larger and more profitable.
2. Leave profits untouched so the company can grow, then tax the larger sums when they are eventually distributed to directors, shareholders, and employees — often at the top personal rate of 45% plus Medicare levy.

It is a simple choice between taking money now or waiting for a bigger, more productive harvest later. Yet governments repeatedly choose the short-term option.

The Political Reality: Why Companies Are Easy Targets

Companies do not vote. Unlike ordinary citizens who can remove a government at the ballot box, companies have no political voice. This makes them an irresistible target for politicians who see them as common property — a “cookie jar” to be raided whenever short-term revenue is needed.

When the reward for risk and hard work becomes insufficient, business owners either wind up the company or relocate to more company-friendly jurisdictions. People who are over-taxed can vote the government out. Companies cannot. That is why it is wiser — and fairer — to tax people, not companies.

Capital Begets Capital

If company profits are not taxed at source, the money does not vanish. It is either reinvested in the business (creating jobs, innovation, and growth) or eventually distributed to owners, staff, and shareholders. At that point the funds can be taxed at higher personal rates.

Real-world evidence confirms this works:

• Ireland slashed its corporate tax rate and attracted massive foreign investment. High-paying jobs were created, unemployment fell dramatically, and overall tax receipts rose as the economy expanded.
• United States under Reagan cut tax rates significantly; federal revenue still increased because economic activity surged.

What Zero Company Tax Would Mean for Australia

Imagine Australia becoming one of the most attractive places on earth for global companies to headquarter. Hundreds of the world’s largest firms would relocate here, bringing thousands of high-paying jobs, new technology, and enormous flow-on benefits to local suppliers and small businesses.

This policy would be especially powerful if paired with world-class infrastructure and communications. The result: more jobs, more shareholders paying tax, more employees paying tax, and a genuinely dynamic economy.

Last updated: April 2026